Top White House economist Kevin Hassett links high tariffs to India’s Russian oil imports and market access resistance, signaling no softening without policy shifts.
U.S. Draws Hard Line on India Trade Amid Tariff Surge
Kevin Hassett, a key economic adviser to President Donald Trump, has warned that the 50% tariff on Indian imports will remain indefinitely unless New Delhi makes strategic policy concessions.
“If the Indians don’t budge, I don’t think President Trump will,” Hassett told reporters at the White House on Wednesday.
His comments came as U.S. Customs and Border Protection confirmed the enforcement of the augmented tariff—a direct outcome of Trump’s August 6 Executive Order aimed at punishing continued Russian oil trade.
Tariffs Tied to Russian Oil and Market Access Issues
Hassett clarified that the current U.S. stance is driven by two key issues:
- India’s sustained import of discounted Russian oil, despite Western sanctions
- New Delhi’s reluctance to open up its markets to U.S. goods and services
“It’s integrated some with the problems that we’re trying to put extra pressure on Russia,” Hassett explained.
“And then there’s the Indian intransigence about opening their markets.”
These dual concerns are complicating already strained trade negotiations, with the U.S. aiming to intensify geopolitical pressure on Moscow while also seeking greater economic reciprocity from India.
Harsher Measures on the Table?
While no additional sanctions have been announced, Hassett hinted that further escalations are possible if India doesn’t shift its stance.
- Trump’s tariffs have already doubled the cost of Indian exports to the U.S., affecting textiles, auto parts, chemicals, and pharma.
- The pressure tactic appears designed to push India back to the negotiating table under revised terms.
Treasury Secretary Sees Long-Term Alignment Despite Strains
Echoing a more conciliatory tone, Treasury Secretary Scott Bessent acknowledged the complexity of the U.S.–India relationship but expressed optimism.
“PM Modi and Trump have a very good relationship… I think at the end of the day we will come together,” Bessent said during a Fox Business interview.
Bessent admitted he had expected a trade deal earlier this year, calling India a top priority. However, he criticized India’s slow progress and dismissed concerns about its rupee trade diversification:
“The rupee is at an all-time low against the U.S. dollar,” he remarked, undermining India’s push for non-dollar transactions.
Strategic and Economic Stakes for India
The U.S. position creates significant strategic and economic dilemmas for India:
- Russian oil remains a cost-effective energy lifeline, especially amid global crude volatility.
- On the other hand, the U.S. is India’s largest trading partner, and the new tariff regime could shave up to 1% off India’s GDP, according to analysts.
- The standoff is also creating uncertainty for Indian exporters, businesses, and global investors.
What Lies Ahead?
The message from Washington is clear: India must either scale back Russian oil ties and liberalize trade policies, or face sustained economic penalties.
- With India Maritime Week, festive season exports, and ongoing rupee trade negotiations on the horizon, the pressure on New Delhi is mounting.
- Any diplomatic thaw could hinge on whether India signals policy shifts ahead of potential bilateral meetings in the coming months.